§ 23-4-1-41 — Liability of persons continuing business in certain cases

Indiana § 23-4-1-41

• Jurisdiction: Indiana
• Title 23: BUSINESS AND OTHER ASSOCIATIONS
• Art. 4: PARTNERSHIPS
• Ch. 1: Uniform Partnership Act

Text

(1) When any new partner is admitted into an
existing partnership, or when any partner retires and assigns (or the
representative of the deceased partner assigns) his rights in partnership
property to two (2) or more of the partners, or to one (1) or more of the
partners and one (1) or more third persons, if the business is continued
without liquidation of the partnership affairs, creditors of the first or
dissolved partnership are also creditors of the partnership so continuing
the business.
(2) When all but one (1) partner retire and assign (or the
representative of a deceased partner assigns) their rights in partnership
property to the remaining partner, who continues the business without
liquidation of partnership affairs, either alone or with others, creditors
of the dissolved partnership are also creditors of the person or
partnership so continuing the business.
(3) When any partner retires or dies and the business of the
dissolved partnership is continued as set forth in paragraphs (1) and (2)
of this section, with the consent of the retired partners or the
representative of the deceased partner, but without any assignment of
his right in partnership property, rights of creditors of the dissolved
partnership and of the creditors of the person or partnership continuing
the business shall be as if such assignment had been made.
(4) When all the partners or their representatives assign their rights
in partnership property to one (1) or more third persons who promise
to pay the debts and who continue the business of the dissolved
partnership, creditors of the dissolved partnership are also creditors of
the person or partnership continuing the business.
(5) When any partner wrongfully causes a dissolution and the
remaining partners continue the business under the provisions of
section 38(2)(b) of this chapter, either alone or with others, and without
liquidation of the partnership affairs, creditors of the dissolved
partnership are also creditors of the person or partnership continuing
the business.
(6) When a partner is expelled and the remaining partners continue
the business either alone or with others, without liquidation of the
partnership affairs, creditors of the dissolved partnership are also
creditors of the person or partnership continuing the business.
(7) The liability of a third person becoming a partner in the
partnership continuing the business, under this section, to the creditors
of the dissolved partnership shall be satisfied out of partnership
property only.
(8) When the business of a partnership after dissolution is continued
under any conditions set forth in this section, the creditors of the
dissolved partnership, as against the separate creditors of the retiring
or deceased partner or the representative of the deceased partners, have
a prior right to any claim of the retired partner or the representative of
the deceased partner against the person or partnership continuing the
business, on account of the retired or deceased partner's interest in the
dissolved partnership or on account of any consideration promised for
such interest or for his right in partnership property.
(9) Nothing in this section shall be held to modify any right of
creditors to set aside any assignment on the ground of fraud.
(10) The use by the person of partnership continuing the business
of the partnership name, or the name of a deceased partner, as part
thereof, shall not of itself make the individual property of the deceased
partner liable for any debts contracted by such person or partnership.
Formerly: Acts 1949, c.114, s.41. As amended by P.L.34-1987,
SEC.305.